Income Tax Assessment Act 1997
SECTION 713-725 Treatment of certain assets and liabilities of general insurance companies 713-725(1)
This section applies if a *general insurance company becomes or ceases to be a *subsidiary member of a *consolidated group.
713-725(2)
If the *general insurance company becomes a *subsidiary member of the group: (a) in working out the step 2 amount for the purposes of the table in section 705-60 , reduce that amount by the sum of the amount of each thing mentioned in subsection (4) ; and (b) in working out the *tax cost setting amount of a thing mentioned in subsection (4) for the purposes of section 705-35 , treat the *market value of the thing as zero.
713-725(3)
If the *general insurance company ceases to be a *subsidiary member of the group: (a) in working out the step 4 amount for the purposes of the table in section 711-20 , reduce that amount by the sum of the amount of each thing mentioned in subsection (4); and (b) for the purposes of section 711-25 , treat the *terminating value of a thing mentioned in subsection (4) as zero.
713-725(4)
The things are the *general insurance company ' s: (a) *assets for insurance acquisition cash flows to the extent that they are used to measure the company ' s adjusted *liability for remaining coverage; and (b) deferred reinsurance expenses to the extent that they are used to measure the company ' s adjusted liability for remaining coverage; and (c) recoveries receivable, or potential recoveries, measured under the *applicable insurance contracts standard to the extent that they relate to insurance contracts or reinsurance contracts; and (d) claims handling costs that are neither attached to, nor directly attributable to, a particular claim, to the extent that these costs are used to measure the company ' s adjusted *liability for incurred claims; and (e) loss components and loss-recovery components of onerous contracts to the extent that they are used to measure the company ' s adjusted liability for remaining coverage.
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.